Related Articles

Restaurant owners often talk about location, location, location as the key to success for their businesses, but even if you’re not in retail, where do you business can greatly affect your operations and profits. Understanding the impact your location can have on your logistics, customer service, taxes and operations will help you determine if relocating and downsizing your business makes sense for you.

Reduced Overhead

One of the main benefits of relocating a business that results in a smaller office, store, plant or warehouse is the reduction in overhead expenses. In addition to reduced heating, cooling and lighting costs, you can lower your insurance costs as well. A smaller location might also result in less rent or a smaller mortgage.

More Operating Capital

If you sell land or a building and rent a new space, you can use the cash from the sale to fund an acquisition, expansion, operations or debt reduction plan. Even though you might end up paying more in rent than you would if you had stayed in your current location, that’s a long-term consideration. If you need cash to keep your business afloat during a tough period or have an opportunity to expand your business, the relocation trade-off might be worth it. If you move to a smaller location, the trade-off might net you money.

Access to Economic Development Assistance

Many towns, cities, counties and states offer relocating businesses incentives to move into their areas, hoping to attract businesses that will create jobs and pay taxes. When you relocate, contact the state, county and municipality economic development offices in areas you’re considering to learn what they offer. You might get tax credits for each job you produce, free worker training programs, reduced utility rates or even a free building. Economic development authorities have databases of empty buildings they will give new businesses as an incentive to relocate to the area.

Lower Taxes

Moving from one location to another can reduce your tax burden. A move from one county to another can lower your sales taxes, while a move to a new state might eliminate inventory or personal income taxes. Calculate your costs for licenses, permits, fees and taxes based on your current location and other locations you’re considering to determine if that difference justifies a move.

Improved Operations

If you chose your original location because of cost or convenience, you might be able to improve your operations by moving to a new location now that you have some history with your sales and operations. If you’re a retailer, a move to a new location can make it easier for current customers to reach you and new customers to find you, resulting in higher sales. You might decrease your shipping time to customers and reduce your costs. Depending on how many employees you have, quality of life issues, including taxes and commute times, can help you attract better employees and retain them longer. If you move into a newer building, you might have access to better digital infrastructure, a free conference room you can book for meetings and reduced utilities costs.

References (3)

About the Author

Sam Ashe-Edmunds has been writing and lecturing for decades. He has worked in the corporate and nonprofit arenas as a C-Suite executive, serving on several nonprofit boards. He is an internationally traveled sport science writer and lecturer. He has been published in print publications such as Entrepreneur, Tennis, SI for Kids, Chicago Tribune, Sacramento Bee, and on websites such Smart-Healthy-Living.net, SmartyCents and Youthletic. Edmunds has a bachelor's degree in journalism.

Photo Credits

Chad Baker/Jason Reed/Ryan McVay/Photodisc/Getty Images

bibliography-iconicon for annotation tool Cite this Article

Choose Citation Style

Ashe-Edmunds, Sam. "The Advantages of Relocating Your Business & Downsizing." Small Business - Chron.com, http://smallbusiness.chron.com/advantages-relocating-business-downsizing-74898.html. Accessed 15 September 2019.

Ashe-Edmunds, Sam. (n.d.). The Advantages of Relocating Your Business & Downsizing. Small Business - Chron.com. Retrieved from http://smallbusiness.chron.com/advantages-relocating-business-downsizing-74898.html